(Yicai Global) Dec. 28 -- Quanjian Group, a healthcare product provider with annual sales in the tens of billions of yuan, is facing public backlash this week because of a report. As well as its healthcare unit, the group's affiliated hospital network also has big problems as it may be violating traditional Chinese medicine rules, according to an Yicai Global investigation.
A report saying that Zhou Yang, a four-year old girl suffering from cancer, died after her treatment was delayed by Quanjian has triggered public questioning over the group's healthcare product business this week. Its auxiliary hospitals dedicated to tumor treatment also have many issues.
The group began its tumor hospitals in 2013 and set up its first in its hometown Tianjin. The hospital has 2,000 beds, 400 employees and entered operations in 2014, according to the firm's website. The hospital holds a medical license for tier-two tumor-specialized hospitals but Yicai Global cannot find any information related to it in the list of hospitals on the official website of China's National Health Commission.
The clinic claims to focus on cancer treatments using secret prescriptions from traditional Chinese medicines. Shu Yuhui, founder, has spent CNY80 million (USD11.6 million) on a collection of more than 600 secret prescriptions in China since the year 2000, according to the company.
Rule-Breaking Use of TCM?
Quanjian's healthcare and hospital businesses are completely separate, but the secret prescriptions are also used at the tumor hospitals, an employee at one of the hospitals who chose to remain anonymous told Yicai Global.
There is an unwritten rule in the hospital, the worker said, that doctors may choose to use western medicine if they see fit, but they must include TCM in all prescriptions. The doctors may not speak ill of the products or prevent patients from using them, he added.
The TCMs used in the hospital are the same secret prescriptions bought by Shu, which are brewed into a decoction and send to patients by the hospital. The doctors know nothing about what these medicines are made of and are not allowed to add drugs to the prescriptions. All the physicians can do is pick the prescription that matches the patient's illness.
All of these decoctions are illegal if they are not registered at Tianjin's municipal health bureau or do not go through the relevant formalities, the employee continued, saying the prescriptions are definitely not registered.
Whether or not the prescriptions work or not is also difficult for doctors at Quanjian's hospitals to decide as there are no records of clinical observations. Some doctors have pushed for observations on their effectiveness but the hospital opposed.
"Quanjian's internal management has been in chaos during recent years," the employee said. "The doctors' occupational ethics determine how they will deal with prescriptions."
Most choose to treat diseases by integrating TCM and western medicine. Some types of cancer can be cured if patients receive both surgery and chemotherapy. Adopting both the secret prescriptions and surgery will certainly be more effective on some cancers than just the surgery.
One of the doctors at the hospital, known as 'the miracle-working doctor,' always provides patients with various TCM prescriptions because that enhances his performance and income, the employee said. Normally, the doctor will conduct a pathological diagnosis and talk with the patients about plans for treatment after reaching a diagnosis. They will choose TCM if the patients reject surgery, chemotherapy or other methods. The secret prescriptions will not be used as a main plan unless the cancer is at its terminal stage and the patient has no other options, the worker added.
Zhou Yang suffered from sacrococcygeal teratoma (a malignant germ cell tumor), which is an incurable diseases and is harder to treat the younger a patient is. Generally, patients live no more than three years after its detection. As per her father's description, Zhou had four surgeries and chemotherapy 23 times, indicating how bad her condition was. Chemo's effectiveness on the disease was not great initially, but she had not been to a tumor hospital for treatment. Persuading Zhou's parents to suspend chemo and have their child take Quanjian's healthcare products may be how the franchise system works, as Quanjian's dealers and its hospitals have two completely different systems.
Alleged Exaggerated Advertising
In addition to the issues with its hospital system, Quanjina's healthcare product business, which was involved in the Zhou Yang incident, is also severely problematic.
Quanjian's 'fire therapy' ignites alcohol-soaked towels and plastic films applied to the patient's body to "dredge the circulator system." Quanjian's patent application for "a process for the implementation of fire therapy" for the dangerous treatment has expired, according to the National Intellectual Property Administration's website. Several media outlets have reported personal injury being caused by Quanjian's fire therapy. At least ten cases related to the treatment can be found on China Judgements Online.
The company also sells two other major products, massage shoe insoles and anion magnetic sanitary towels. The shoe insoles treat O-legs and corns, can cure heart disease when put under the armpit, improve sleep quality when put under the pillow and even treat prostatitis when put in underwear. The sanitary towels can also treat prostatitis, and are edible with an anion magnetic central processing chip to balance the human body and enhance their immune system.
Yicai Global verified with several patent attorneys that the two products are not patented. The applications for their patents are both "deemed to be withdrawn after the patent is released," according to the NIPA website. This means they have never been approved or patented, said Fu Gang, a senior partner at a law firm named Xieli.
China Central Television criticized Quanjian for allegedly exaggerating advertising in a news report at the end of 2014, for saying the sanitary towels can cure prostatitis and shoe insoles can cure all diseases. Quanjian responded online, saying that some media reports about its products were not based on facts and were malicious plans inconsistent with Quanjian's advertising content.